News Release

TECO Energy responds to Standard & Poors ratings action

TAMPA, July 20, 2004

TECO Energy, Inc. (NYSE: TE) today responded to the action taken by Standard & Poors (S&P) today to affirm Tampa Electric’s credit rating at BBB- while downgrading the credit rating of TECO Energy to BB with a stable outlook at both companies.

Executive Vice President and CFO Gordon Gillette said, “As we’ve stated, we’re focused on improving TECO Energy’s ratings and ratings parameters over time. While S&P’s action today represents a setback for the holding company, TECO Energy, we are pleased that S&P has affirmed Tampa Electric as an investment-grade company. Tampa Electric has strong credit metrics and S&P has recognized the steps that we have taken to ensure that Tampa Electric continues to have a strong investment-grade rating. 

“We continue to make progress in our efforts to reduce the business risk from the merchant power sector and remain committed to our focus on our Florida utilities and other profitable unregulated businesses, the strategy that we first announced last year. With the S&P review now complete and the ratings at stable levels, we can continue the process of improving our financial position,” Gillette went on to state. TECO Energy, Inc. is a diversified energy-related holding company headquartered in Tampa, Florida. Its principal businesses are Tampa Electric, Peoples Gas System, TECO Transport, TECO Coal and TECO Wholesale Generation.